Overview of Affordable Housing Crisis

Life has changed for California workers. They work longer hours for less money and are faced with whopping increases in their housing budgets. Disposable income has diminished. Commute time and transportation expenses have markedly increased. Medical coverage is out of reach for many. Medical professionals and college professor look elsewhere to a softer housing market. Teachers are already laid off in the big State government employment sector and hiring freezes.

According to the State Housing Task Force, high housing costs impact low-income groups drastically. Food, clothing, medical, recreation are sacrificed for shelter costs. And, the stress on the low and moderate family is only increasing. The length of time needed to achieve home ownership is longer and out of reach until families have moved into the above medium income. To buy a medium income home today one needs $100,000.00 of family income to qualify for a loan plus the down payment. As interest rates rise these opportunities will diminish.

Water and wastewater infrastructure, environmental expenses, and increasing land costs make affordable housing more difficult to build at market rate. So this market has been left to nonprofit developers who cannot keep up with the demand.

With rents so high, however, one wonders why the for profit developer is still on the sidelines and why the big financial institutions, pension funds, mortgage banks, syndicates, and housing funds have not gotten into the futures market in low income housing starts.

The Federal Home Loan Bank underwrote $1.1 trillion in home loans last year, the bright spot in a dull economy that has laid off millions of workers while leaving last year's unemployed off the dole rolls. More states are cutting social programs to avoid deficits. Housing Tax credits for writing down project costs are becoming less available while housing growth mandated by the state is increasing.

CLIH hopes the community will partner to offset some of these effects.


   

Coalition for Low Income Housing
A California Public Benefit Corporation
1250 4th St., Los Osos, CA 93402
(805) 534.0800, info@clih.net

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